Berger profit grows 5.42pc in Q1

Berger Paints Bangladesh saw a 5.42 per cent year-on-year increase in net profit during the April-June quarter this year, thanks to reduced operating costs and a significant rise in finance income.
The multinational paints maker, commanding half of the country's paints market, reported net profits of Tk 972 million for the June quarter, up from Tk 922 million in the same quarter the previous year.
According to the unaudited financial statements of Berger, whose financial year commences on April 1, the company's consolidated earnings per share rose to Tk 20.96, compared to Tk 19.87 in the corresponding quarter last year.
Despite the positive profit growth, the company faced challenges in its sales revenue, which only saw a 0.87 per cent year-on-year increase to Tk 6.92 billion. The growth was hindered by macroeconomic adversities and rising costs of raw materials.
A company official, speaking on the condition of anonymity, pointed out the hurdles the paints industry is encountering due to expensive raw materials and the devaluation of the local currency against the US dollar.
The surge in import costs driven by a stronger dollar and runaway inflation led to reduced spending on paint products, impacting Berger's expected revenue growth, he said.

Despite these challenges, Berger managed to offset some of the costs by adjusting sales prices and reducing operational expenses, resulting in a comparatively higher profit in the first quarter, added the company official.
Berger Paint's operating expenses reduced by 2 per cent to Tk 875 million, while net finance income jumped 201 per cent to Tk 61.27 million in the June quarter.
Due to costlier raw materials, its cost of sales, which is the sum of all direct costs associated with making a product, rose 3 per cent to Tk 4.79 billion during the quarter.
Berger Paints Bangladesh got listed on the stock market in 2006 by issuing shares representing only 5 per cent of its paid-up capital.
The company's annual profit increased by 3.4 per cent year-on-year to Tk 3.01 billion in the year that ended in March this year and the board declared a 400 per cent cash dividend for the year.
As the paints maker is facing a dollar crisis for importing raw materials, it has recently decided to borrow a $60 million loan from its parent company - J&N Investments (Asia) Ltd.
The company is going to take the loan so that it does not face any difficulties in bringing raw materials, said Khandker Abu Jafar Sadique, company secretary of Berger Paints Bangladesh recently.
Meanwhile, Berger Paints has decided to invest Tk 4.80 billion to establish a factory in Bangabandhu Sheikh Mujib Shilpa Nagar, which is expected to be completed by April 2025.
Berger Paints also set up a wholly-owned subsidiary named "Berger Tech Consulting" for technology-enabled services (ITES) here in Bangladesh with an investment of Tk 2.50 million last year.
The company's stock closed at Tk 1,755.90 on Thursday, losing 0.05 per cent over the day before.
babulfexpress@gmail.com